Cloud Cost Optimization for 2019

Written by Matias Cabezas

Practically everything runs in the cloud these days. Cloud technology and the multiple platforms available today certainly make running apps and web services in the cloud easier. At the same time, cloud infrastructure has new features that expand its capabilities, including deployment features like containers and advanced administrative tools.

It is relatively easy to set up a capable cloud environment for any app or service. The real challenge is creating an environment that is both effective and efficient, especially in terms of setup and running costs. With the New Year just around the corner, every business is no doubt looking for ways to run smoother and more economically. Thankfully, cloud cost optimization can be done in many different ways across multiple services.

Understand the Pricing Model

One of the first things you need to do if you want to optimize your cloud costs is taking the time to fully understand the pricing model of the service you decide to use. Amazon, for example, uses different pricing models for their services. It is renowned though for its pay-per-use framework. Hence, one of its most popular options is on-demand, where you payby the hour or by the second for the resources you use.

There is also a reserved pricing model. As the name suggests, you basically reserve cloud resources for use, but you pay up to 75% less than the normal price when the reserved resources are not in active use. This allows you to deal with spikes in traffic and other challenges, knowing that you have the server capacity to handle them ready at any time.

Spot market pricing is also gaining traction for cases where you need batch processes that can be stopped and picked up again later when spot instances are available again. It is a pricing model tied to market demand. The price goes up when demand is high, and vice versa. With spot market pricing, you save during low-demand times, but depending on the cloud resources you use and how your users behave, you may not be able to access necessary resources when you most need them—and their price will be higher too.

Review Usage Patterns

Digging deep into the analytics and figuring out how your users behave or use the services you run in the cloud can also help you optimize your cloud costs. Such analytics can serve to point you in the direction of the ideal pricing model for you.

Combined with reserved pricing, it is easy to schedule the way cloud resources are made available. AWS, GCP, and Azure all support this approach towards optimizing cloud costs. The same method can also be used when running services designed for public use. However, you really need to think about your users and how they interact with the servers before doing any optimization.

Make It Scalable

Scalability is an important factor, not only because it ensures steady growth for web apps and services running in the Cloud, but also because you can really save a lot of money on running costs. Rather than paying for resources you don’t need, start with a cloud environment capable of handling the services and the number of users you have.

Popular cloud services support immense scalability. You can tweak your cloud configuration to the last detail, which means you can really limit the resources you use. The process starts with you taking a closer look at your requirements and specific needs, then figuring out the kind of cloud environment you need to set up to support them.

You can go a step further and optimize the way the cloud environment is set up as well. Instead of running multiple instances for different functions, you can combine some of them and reduce your overall cost further. For example, you could run multiple containers on a tiny cluster then scale them out to their own cluster when traffic is high. Each container gets more CPU then as needed.

The Right Tools for the Job

If you happen to use AWS, there are actually a lot of tools you can use to help optimize your cloud costs. For starters, you have the AWS Cost Explorer helping you deal with tasks such as filtering data records and understanding the usage patterns better. Combined with CloudWatch, there are so many new optimization options available when using Cost Explorer.

Those on Azure also have the ability to dig deep into the analytics and find ways to save. Both the billing page and Azure Enterprise Agreement (EA) portal contain a lot of these insights, which you can use to get started. There are even third-party tools designed to help you cut cloud costs when using Azure, although many of them are premium tools. For some long-running services, for example, Google auto-adds discounts and you can still then reserve instances—increasing the discount.

Check Your Service Agreement

There are also ways to optimize your cloud costs based on how your account is set up. The Azure Enterprise Agreement is a good example because Microsoft offers a wide range of discounts for their cloud services. You can get anywhere from 5% to 30% on services such as SQL Azure and Cloud Services.

AWS does the same thing with its pricing structure. The way your account is set up influences how you are charged for the services you use. Read the terms and conditions—and the Promotions page on Amazon Web Service—to learn more about how you can save on the cloud instances you use.

Pursue the Best Discounts

With the cloud market becoming more and more competitive, it is not surprising to see big players – even market leaders – offering discounts and special offers to attract more users. Fortunately, cloud providers offer discounts to new and
existing users alike, which means there are also more opportunities to save.

One of the ways you can earn a discount is by prepaying for the services you use. You will still be billed on a monthly basis but prepaying for the services you use allows you to reduce cloud bills by up to 30%. You can even compare regions. It may be that using different locations for your cloud environment is particularly rewarding.

The tips and tricks we discussed in this article will help you optimize your cloud cost without sacrificing features and performance. Start implementing these tactics and watch as your cost-per-hour goes down by a substantial margin.

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